Crypto adoption in the UK

London has been indicated as the world’s most crypto-ready city for business. The news surprised many people as they expected Dubai, Zug, or even Berlin to emerge as web3 adoption leaders.

It shows that Rishi Sunak’s, the UK Prime Minister’s, vision to make the country the leader of crypto innovation could be more than just idle words. Hence, we decided to examine the state of crypto adoption in the UK in 2023 and forecast where it’s heading.

 

Crypto market in the UK

The United Kingdom is perceived as one of the largest crypto economies in Europe and arguably the fastest-growing one. Between July 2021 and 2022, it reported $233 billion in transaction value of cryptocurrency – more than any other European nation.

The web3 market in the UK is growing primarily due to transactions in DeFi and NFTs spaces. The UK looks to be the continent’s leader in these fields, not only reporting the highest transaction value but also claiming nearly 20% of all crypto-related web traffic in Europe.

UK’s crypto progress has also been boosted by a relatively web3-friendly environment and slightly better regulatory certainty. Obviously, it’s far from perfect – especially since UK authorities are planning to change the rules due to the recent FTX collapse. But it’s still more precise than in many other European countries, which significantly reduces the barriers to entry for web3 startups. UK’s government also continues to at least express their intention to enhance the crypto-friendliness of the country.

UK crypto stats 2023

Then, how do promises of Rishi Sunak and Liz Truss, along with the increasing number of crypto transactions, affect the level of crypto adoption among “average Joes”?

How many people in the UK invest in crypto?

The crypto ownership rate in the UK varies from 5% to 7% of the population, depending on the market conditions. The aforementioned Recap’s report even stated an optimistic number of 11% of UK citizens holding tokens. Crypto is usually owned by people between the age of 25-34, with an income much higher than above – around 40% of cryptocurrency owners earn more than £200,000 yearly.

What is the most popular cryptocurrency in the UK?

Regarding particular cryptocurrencies, the UK seems to be relatively conservative, with Bitcoin being a part of 62% of web3 portfolios and Ethereum – 37%. The next places in the popularity ranking belong to Ripple, another well-known and established crypto, and stablecoins.

What is the main category of crypto spending?

However, do UK people only HODL their digital assets? Their habits seem to have switched in recent years. In 2020, 58% of tokens were used for investment purposes, with only 42% serving as means of payment. It changed in 2021, when – probably due to the huge investment opportunities – the majority of crypto owners (52%) used their assets for purchases. This trend is likely to continue in the coming years.

Why do people avoid crypto in the UK?

The reason for it could be the declining fear of cryptocurrencies. However, there are still over 70% of people who are not interested in having or investing in tokens and have no intention to change this approach in the future. The most popular obstacles to joining the web3 space are:

• Too much risk,
• Lack of money available to invest,
• High level of complexity.

Blockchain companies in the UK

Obviously, it’s not only ordinary people who drive crypto adoption in the UK. And, as having the capital considered a Top Crypto Hub City obliges, Blighty tries very much to attract more and more web3 startups.

Currently, the number of blockchain-related companies in the UK is around 250-300. The vast majority operate in the banking and financial services, trying to disrupt or, at least, improve the current state of these areas. There are also startups that attempt to implement blockchain principles into the supply chain, retail, entertainment, or media industries.

Crypto startups from London (and beyond)

As London remains the undisputable wonderland for web3 startups in the UK (and in Europe, as it seems), most companies were established and developed exactly there. However, there are a few notable examples from other cities – for instance, Fetch.AI that received a significant amount of attention due to the hype around Artificial Intelligence.

Then, to give you a better overview of the UK crypto market and make you familiar with the most renowned startups established there, we prepared a short list:

• Blockchain.com – certainly one of these companies that understood the value of having the right domain early on! However, Blockchain.com is not only a well-known webpage. Most importantly, it’s an online crypto wallet, exchange, and blockchain data provider.
• Fetch.AI– Cambridge-based startup that combines decentralization with machine learning. They enable connecting various devices and services to the Internet of Things network, using AI and blockchain to improve their efficiency.
• Elliptic – a company focused on reducing risks related to crypto businesses. Thanks to the use of blockchain technology (and data collected on-chain), they can detect financial crime and improve the security of platforms.
• HLTH – an exciting startup operating in the healthcare industry. The goal of HLTH is to improve the global health ecosystem by enhancing the trustworthiness, interoperability, and security of patients’ data. It’s possible thanks to blockchain technology, of course.
• Sprout.AI – another AI-related company, this time focused on automating various claims – particularly in the healthcare and property industries.
• Copper – a digital asset management provider focused on enabling effective and convenient investments for institutions. In 2022, it was included in the Forbes Blockchain 50 list.
• Cryptiony – well, we must mention that recently we’ve also become a part of the UK crypto scene. We won’t praise ourselves the same way as the six startups mentioned above, but if you’re looking for a quick and easy crypto tax solution, look no further than our UK crypto tax calculator!